Class Action And Arbitration Crossover: Appellate Court Affirms Arbitrator Computational Error Correction In Class Action Attorney’s Fee Allocation Dispute

First District, Division 1 Addresses Claimed Conflict Between JAMS Rules and CCP Arbitration Correction Provision.

     Here is a decision that involves consideration of class action and arbitration crossover issues.

     Two attorneys deserving of attorney’s fees in a substantial class action settlement entered into an agreement among themselves on the allocation of fees, calling for binding JAMS arbitration to resolve any allocation dispute. A lot was at stake—over $9.4 million in fees were subject to division.

     The case—Thierman v. Kelson, Case No. A124367 (1^st Dist., Div. 1 Feb. 5, 2010) (unpublished)—is interesting in its discussion on the rules that govern JAMS arbitration proceedings. The JAMS arbitrator made a post-award computational error correction, and the aggrieved party argued over whether JAMS rule 24(j) or Code of Civil Procedure section 1284 applied. The appellate court found no conflict between the two rules, but has a nice discussion on what parties can contractually agree to in an arbitration agreement. Also, the appellate court reversed an approximate $10,000 fee award arising out of the allocation dispute, finding no fee clause that allowed such entitlement in the allocation agreement.